My Countercyclical Profession

Some personal news...

Photo by Jongsun Lee on Unsplash

As multiple wags on social media noted over the weekend, a thousand years ago the combination of an earthquake and a total eclipse would have been enough to cause people to believe the end times were at hand. Those were the measures of geopolitical risk back in the day.

In 2024, however, there are still some clear signs that the world is becoming a riskier, more dangerous place. One tell is that some countries are no longer treating foreign embassies and consulates as sovereign territory, which seems like a pretty big deal. Another is that Donald Trump might be elected president later this year, and he injects a large source of uncertainty and confusion into any forecast.

The last sign is a bit more personal. Eight years ago I wrote about how Trump’s rise was, weirdly enough, “making me well-traveled and more affluent”:

Trump’s myriad statements have provoked some anxieties overseas, and it’s not like his advisers are gonna calm anyone down. So they ask people like me to speak instead….

Ever since the Economist Intelligence Unit labeled Trump as one of the top 10 geopolitical risks for 2016, I’ve been fielding calls and offers from financial firms asking me to explain what the heck is going on during this election cycle and what a President Trump would actually do once in office….

Trump is good for business. The more batshit crazy he sounds on the campaign trail, the more that reading what he says pays off.

In short, when folks get nervous about the state of American foreign policy and the global political economy, I get a whole bunch of pings from money managers.

Which leads to, um, some personal news:

State Street Corporation (NYSE: STT) today announced a new partnership with Daniel W. Drezner, Professor of International Politics at The Fletcher School, the graduate school of global affairs at Tufts University, as its newest academic partner to provide counsel and fresh perspective for clients seeking to navigate the growing complexities of geopolitical risk.

Mr. Drezner will partner with State Street Associates, the firm’s hub for partnerships with academics and fintech start-ups, which powers its award-winning markets research platform for foreign exchange trading, equities trading, and securities lending clients. The partnership will further build on State Street’s existing suite of capabilities that help investors identify emerging risks, including analytics from longtime partner, MediaStats, which uses large language and artificial intelligence models to synthesize information from millions of digital and social media posts as well as GeoQuant, which combines data science and human expertise to quantify a broad spectrum of geopolitical risks.

"We are thrilled to announce this partnership with Professor Drezner as his extensive experience in international economics, coupled with his deep understanding of global politics, will further enhance our ability to deliver incisive analysis on geopolitics," said Will Kinlaw, head of research for State Street Global Markets. “Our clients are increasingly contemplating the risk of ongoing and potential conflicts around the world as well as several high-stakes, national elections."

One of the things about being in a countercyclical profession is that occasionally, even as the world gets more chaotic, demand for one’s services goes up. It is a guilt-inducing fact of life. In this instance, the demand for my services is just another sign of increased geopolitical risk.

Rest assured, this does not mean that the hard-working staff here at Drezner’s World will work less hard. This newsletter will continue at its present rate of output. Indeed, think of my partnership with State Street Associates as more of a complement than a substitute for this newsletter. Any time they want me to think about some sort of trouble in the world, it is entirely possible that my rough sketch of those thoughts will appear here first.